Solana (SOL), once ranked as the third-largest cryptocurrency by market capitalization after Bitcoin and Ethereum, has dipped below its realized price level for the first time in nearly three years.
On March 11, SOL fell to approximately 8% below its realized price of $134, a level last seen on March 9.
This marks a significant shift for the token, which has experienced both sharp rallies and declines in recent years.
Source: CoinMarketCap
The realized price represents the average price at which tokens were last moved or purchased.
When an asset falls below this threshold, it indicates that a substantial portion of holders are now at a loss, having bought their tokens at higher prices.
The last time Solana faced a similar drop below its realized price was in March 2022, when it entered a prolonged downtrend before recovering in November 2023.
While brief dips have occurred in the past, such as the sub-$2 drop in November 2020, the current decline is unfolding amid broader market weakness.
Solana’s decline and market selloff
Solana’s price downturn is not occurring in isolation.
The broader crypto market is experiencing a widespread selloff, contributing to downward pressure on SOL.
Data from blockchain analytics firm Glassnode shows that the price has been moving in tandem with declining sentiment across the industry.
#Solana just plunged below its Realized Price for the first time in nearly 3 years. Currently, $SOL price is $124 – about 8% below the realized price of $134: glassno.de/4hmT36H
Another major factor behind Solana’s struggles is a sharp decline in network revenue.
According to DefiLlama, daily fee revenue on the Solana blockchain has plunged to approximately $420,000, marking a 90% decline from its January peak, when SOL was trading at $250.
This drop in revenue coincides with a slowdown in memecoin activity, which had driven significant trading volume earlier in the year.
A decline in transaction fees suggests reduced network demand, which could further weigh on the price of SOL.
Historical trends raise uncertainty
Solana’s price history suggests that a dip below the realized price level does not always lead to a prolonged downtrend.
However, past instances of SOL falling below this threshold have been met with multi-week declines before recovery.
The last major drop occurred in early 2022, followed by a prolonged bearish phase before SOL climbed back above the realized price in late 2023.
Market participants remain uncertain about whether this trend will repeat itself.
Unlike previous instances, SOL’s current downturn aligns with broader market weakness and declining fee revenue, creating a more challenging environment for recovery.
Despite this, the crypto market has historically been volatile, with sharp rebounds often following periods of downturns.
Bullish and bearish scenarios
Looking ahead, analysts remain divided on Solana’s long-term trajectory.
In October 2023, asset management firm VanEck released a valuation model predicting that SOL could experience a 10,000% increase in value by 2030, assuming the blockchain reaches 100 million users.
Under this optimistic scenario, Solana’s price could surpass $3,200 by the end of the decade.
However, the same report also outlined a bearish case, in which SOL could trade as low as $9.81 if adoption stagnates and competition intensifies.
The current decline below its realized price may indicate growing bearish sentiment, but the longer-term outlook will depend on factors such as network adoption, technological advancements, and macroeconomic conditions.
Solana’s performance in the coming weeks will be closely watched by traders and investors to determine whether it can reclaim higher levels or if further declines are on the horizon.
As of now, the token faces mounting pressure from both internal and external market forces, making its next move highly uncertain.
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